Implementation of the Strategic Investment Priorities Plan (SIPP), a list of priority areas that will be entitled to tax incentives under the new Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, is expected to take effect in January 2022.
Trade and Industry Undersecretary Rafaelita Aldaba revealed at the recent virtual webinar with the German Chamber of Commerce and Industry that based on the implementation schedule “You will expect the SIPP to start next year, in January, 2022.”
Aldaba said the Fiscal Incentives Review Board (FIRB), which held its first meeting last week, already approved the schedule for the implementation of the SIPP as presented by Board of Investments Managing Head Ceferino S. Rodolfo.
Under the schedule, Aldaba said the BOI will be presenting to the FIRB the draft SIPP towards the end of this year. So far, the BOI is already in the process of doing the rounds of consultations before finalizing the SIPP.
She explained that while the SIPP is still under consultations, the current Investment Priorities Plan (IPP) of the BOI will serve as the transition list. This means that activities covered under the current IPP would form part of the SIPP.
Once the SIPP is approved and implemented, all existing activities will be upgraded and incentives will be granted to the company or the activity.
The new priority investment list defines the coverage and classifies industries into three tiers. It also provides the conditions to qualify in the listed entities.
In identifying the priority industries, the SIPP will give considerable weight to the substantial amount of investments, employment generation and significant value of net exports.
It will also use as criteria modern, advanced or new technology applications, new processes and innovations to support the government’s sustainable development goals, and address missing supply chain gaps.
Activities that will be listed will also consider the scope and coverage of geographic location.
As the DTI is implementing a new industrial strategy known as Inclusive Innovation, Industrial strategy to grow globally competitive,15 priority industries are being prioritized for investment promotion. This would include auto and auto parts, chemicals, agribusiness furniture garments paint industry tool and die, iron and steel, electronics and electrical shipbuilding and ship repair, aerospace and aircraft maintenance construction transport and logistics, tourism, IT-BPM, digital economy climate change and mobility solutions.
With the pandemic and economic recession, the BOI has further refined the IPP since last year through the REBUILD program or revitalizing businesses, investments, livelihood, and domestic demand with focus on basic groups of industries that would cover agribusiness food manufacturing, health products, online education and health services industry.
To address supply chain gaps, the upcoming SIPP would also include activities on tool and dye, iron and steel, chemicals, auto and auto parts and personal mobility electric vehicles
To support modern urban farming, the SIPP would also include cold chain warehousing.
Also covered under climate change are activities for smart cities, shipbuilding, digital trade transport logistics construction, telecommunications, and sustainable and renewable energy.
For the high value jobs, the SIPP will be focusing particularly on the creative segment of industries — furniture, textile garments, and aerospace parts to the assembly, along with the integration of new technologies.
More high tech products characterized by the R& D with significant value added and higher productivities that represent breakthroughs in science and health, high paying jobs, and generation of new knowledge are also included.
New products and services that are intellectual property registered or licensed in the Philippines, commercialization of patents, industrial designs, copyrights, and utility models, along with highly technical, manufacturing, and activities that are critical to structural transformation of the economy will also be considered in the SIPP.